ANNO. d silica. Minerals. Cape Bedford. process testwork ASX. grid wheree high grade silica. sand.

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1 ASX ANNO UNCEMENT 2 October 218 High tech markets eyed for Cape Bedford d silica 2,m in fill resource drilling program planned to commence during October at Cape Bedford Silica/Heavy Minerals Project, North Qld Drilling to target upgrade of maiden Inferredd Mineral Resource for Nob N Point Resource New offshore bulk testwork planned to confirm potential high tech applications for high grade silica sand Emerging mineral sands miner Diatreme Resources Limited (ASX:DRX) announced today plans for further exploration drilling at its Cape Bedford Silica/Heavy Minerals Project, along with additional testwork to be undertaken to identify potential high tech applications for its high quality silica sand. This follows Diatreme s announcement of a maiden Inferred Mineral Resource for the project s Nob Point Prospect of an estimated million tonnes at > 99% purity silica (refer ASX announcement 13 August 218) and bulk sample process testwork results confirming the project is capable of producing high qualitdrilling program at Nob Point in late October, which is being undertaken to potentially allow an upgrade of the initial resource from an inferred to an indicated or silicaa sand at 99.9% SiO2 (refer ASX announcement 16 August 218). The Company is now planning to commence a further extensive measured resource category, thereby increasing the level of confidence in the nature andd size of the resource. Diatreme s exploration drilling team are planning a program of some 1 additional air core holes for a total target of approximately 2,,m drilling metres to be completed. This will be undertaken on a nominal 5 x 5m grid wheree topography allows and will potentially increase confidence in the lateral and vertical continuity of the high grade silica sand. The drilling program will be subject to further extensive sample testing to meet JORC code requirements for an upgrade and to allow furtherr detailed planning for potential mining and permit application activity.

2 Fig 1 Map showing drill hole locations and the Inferred Resource outline from the maiden m resource (ASX release 13 August 218) Previous Bulk Sampling During July 218 (refer ASX release 16 August 218) a 1.8 tonne representati ve bulk sample extracted from the Cape Bedford Inferred Mineral Resource using Diatreme s air core drilll rig was submitted to IHCC Robbins (IHCR) for testing, with 14 samples of an average weight of 17.3kg delivered to IHCR s process testwork facility. All material recovered from each 3m drill interval was included in the sample. Fig 2. Process test results for MG12 spiral separator (silica product highlighted) MG12 Wt Wt % Conc Mid Tail (Prod) Feed TiO2 Fe2O3 SiO2 % % % Al2O3 Cr2O3 MgO % % % MnO ZrO2 P2O5 % % % U XRF ppm Th XRF ppm

3 Testing Outcomes During testing, one pass of Mineral Technologies MG12 spiral produced a high quality (99.9% SiO2) silica product with a recovery of 88% from f the Nobb Point Resource The bulk sample testwork also demonstratedd that the processing plant is likely too be relatively simple due to negligible oversize, minimal heavy minerals (.19%), low level of slimes (3%), andd excellent removal of heavy minerals on spiral separators. Further Priority Bulk Testing Diatreme has identified potential high tech applications for the Nob Point silica resource following recent meetings in China with a number of high purity silica sand end users and product sales agents. The manufacture of photovoltaic panels (solar panels) requires certain specific product characteristics which include a minimum silica content of 99.9 % and a low Fe (iron) content which gives the glass the high transparency needed for efficient operation of the panels. Diatreme s previous bulk sample testing (as per Fig 2.) showed a Fe level of.2 % (2 ppm) on its primary tails product. These characteristics already meet and exceed requirements for high end float, container and automotive glasss production. However further lowering of the silica s Fe level under 2ppm has the potential to attract a significant price premium as the products market usage can then expand to include solar r panels, LCD and optical glasss production. Diatreme has identified a specialist independent testing lab in China that certifies a significant portion of the low Fe silica product coming into China. It has assisted a number of large international silica sandd producers to access this lucrative market by providing specialist testing, certification and process design assistance. A 35kg sample for bulk testing by this facility is currently being prepared andd will be sent to China for testing and assistance in process flow sheet design to see if the Nob Point silica product ss Fe levels can be reduced to a level that enables production of a low Fe high purity silica sandd product. The testing undertaken on the initial bulk sample was undertakenn on a singlee pass spiral. However, Diatreme considers that increasing the spiral passes may further reduce the Fe content, particularlyy if it is determined by testing the Fe is bound within the heavy mineral component of the sand. The Companyy therefore iss optimistic of achieving positive results on the new tests.

4 Results are expected in mid to late November, subject to the offshore testingg lab s existing work programs, and Diatreme will keep the market fully informed as it progresses further. Located 2km north of Cairns and near the world s largest silica sand mine at a Cape Flattery, the Cape Bedford project has the potential to supply the fast growing Asian markets with high gradand other sectors. The global silica sand market is silica sand used in high end glass manufacturing within the automotive, construction, electronics seen reaching nearly US$1 billion in revenues by 222, with a healthy compound annual growth rate of 7.2% (source: IMARC Group). Diatreme s CEO, Neil McIntyre said: Cape Bedford continues to show excellent prospects as a potential source of jobs and investment for the local community and at the appropriate stage a potential p revenue stream for Diatreme. Together with our flagship Cyclone Zircon Project, where we are currently advancing a definitive feasibility study, we intend to position Diatreme to become a new producer of silica and mineral sands s products amid a favourable pricing environment of rising demand and constrained supply. Neil McIntyre Chief Executive Officer Greg Starr Chairman Contact Mr Neil McIntyre Ph Website diatreme.com.au E mail manager@diatreme.com.au Forward looking statements: This document mayy contain forward looking statements. Forwardd looking statements are often, but not always, identified by the use of words such as seek, indicate, target, anticipate, forecast, believe, plan, estimate, expect and intend and statements that an event or result may, will, should, could or might occur or be achieved and a other similar expressions. Indications of, and interpretations on, future expected exploration results or technical outcomes, production, earnings, financial posiition and performance are also forward-looking statements. The forward-looking statements in thiss presentation are based on current interpretations, expectations, estimates, assumptions, forecasts and projections about Diatreme, Diatreme ss projects and assets and the industry in whichh it operates as well as other factors that management believes to be relevant and reasonable in the circumstances at the date that such statements are made. The forward-looking statements are subject to technical, business, economic, competitive, political and social uncertainties and contingencies and may involve known and unknown risks and uncertainties. The forward-looking from the estimated or anticipated events or results expressed or implied by any forward-looking statements. All forward-looking statements made inn this presentation are qualified by the foregoing cautionary statements. Disclaimer: Diatreme and its related bodies corporate, any of their directors, officers, employees, agents or contractors do not make any statements may prove to be incorrect. Many known and unknown factors could cause actual events or results to differ materially representation or warranty (either express or implied) as to the accuracy, correctness, completeness, adequacy, reliability or likelihood of fulfilment of any forward-looking statement, or any events or results expressed or implied in any forward looking statement, except to the extent required by law. Diatreme and its related bodies corporate and eachh of their respective directors, officers, employees, agents andd contractors disclaims, to the maximum extent permitted by law, all liability and responsibility for any direct or indirect loss or damage which may be suffered by b any person (including because of fault or negligence or otherwise) through usee or reliance on anything contained in or omitted from this presentation. Other than as required by law and the ASX Listing Rules, Diatreme disclaims any duty to update forward looking statementss to reflect new developments.

5 About Cape Bedford The Cape Bedford EPM17795 is located approximate ely 2km north of Cairnss in North Queensland, and covers the extent of a large Quaternary sand dune field, f part of which is currently being mined by Cape Flattery Silica Mines Pty Ltd ( CFSM), a wholly owned subsidiary off Mitsubishi Corporation. Cape Flattery has operated since 1967 and is the world's largest silica sand mining operation. The Cape Bedford/Cape Flattery region of north Queensland is dominated byy an extensive Quaternary sand masss and dune field that stretches inland from the present coast for approximately 1km and extends 5km from north to south. Historical exploration has focused on the Cape Flattery area, within the Mining Leases of CFSM, but reconnaissance exploration has been carried out over the entire dune field in the late 196's and again inn the early 198's. This exploration confirmed the presence of both silica sand and heavy mineral sands, and Diatreme intends to build on the existing data and initially target those areas (e.g. Nobb Point) where prospective silica sandd dunes have been identified and access is readily available. Following the signing in 217 of a Conduct and Compensation Agreement and a Cultural Heritage Agreement with the traditional owners, Hope Vale Congress, Diatreme has worked closely with Hope Vale Congress to maximise the economic benefits for the local community. In August 218, Diatreme defined a maiden Inferred Mineral Resource for thee project s Nob Point Silica Sand Prospect located in the southern area of the tenement (refer ASX announcement released 13 August 218).

6 Nob Point Resource